Sunday, September 21, 2008

Many commentators have called the Paulson bailout socialism for the wealthy. For example, former senior advisor to the U.S. Treasury and highly-regarded economics professor, Nouriel Roubini, says that Washington’s bail outs are “socialism for the rich, the well connected and Wall Street; it is . . . a corrupt system where profits are privatized and losses are socialized.”

But as leading journalist Robert Scheer notes, this is more like fascism than socialism:

What is proposed is not the nationalization of private corporations but rather a corporate takeover of government. The marriage of highly concentrated corporate power with an authoritarian state that services the politico-economic elite at the expense of the people is more accurately referred to as "financial fascism" [than socialism]. After all, even Hitler never nationalized the Mercedes-Benz company but rather entered into a very profitable partnership with the current car company's corporate ancestor, which made out quite well until Hitler's bubble burst.

Indeed, historian Gaetano Salvemini argued in 1936 that fascism makes taxpayers responsible to private enterprise, because "the State pays for the blunders of private enterprise... Profit is private and individual. Loss is public and social" (page 416). This perfectly mirrors Roubini's statement about the current bailout plan.

Remember that one of the best definitions of fascism is the "merger of state and corporate power". And remember that a significant agenda of fascists is to ensure loyalty from their nation's corporations.

In general, apart from the nationalizations of some industries, fascist economies were based on private property and private initiative, but these were contingent upon service to the state.

***Fascist governments encouraged the pursuit of private profit and offered many benefits to large businesses, but they demanded in return that all economic activity should serve the "national interest".

Sound familiar?

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